Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets. In flat or choppy markets, your have to be extremely careful. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable Excel list of the stocks going ex dividend during the next week or two. The list contains many dividend paying companies, all with market caps... more
Dividend investors have been dumping their BP stock for weeks now, given concerns that the dividend would be axed. Yesterday, BP (BP) officially suspended their dividend, confirming investor fears. Now ex-BP investors are looking for quality stocks to replace their lost dividend yields.Of course investors aren’t expecting to find stocks offering a 10.5% dividend yield like BP had until yesterday, but replacing BP’s dividend yield is not an easy task either. Consider BP stock before the Gulf rig explosion on April 20:... more
In our previous article, “The Top 5 U.S. Dividend Paying Stocks for 2010”, we identified the five U.S. dividend stocks which are projected to make the largest cash dividend payouts to shareholders in 2010. This elite group included 2 Energy stocks, 2 Healthcare stocks, and a Telecom stock. The top 5 foreign dividend paying stocks that we’ve identified include a Spanish bank, a Chinese telecom, and 3 energy companies, from the U.K., Holland, and France. It turns out that 2 of these foreign Energy stocks are actually projected to pay out more cash dividends than any of the U.S. stocks. All 5 of these foreign dividend stocks trade in the U.S. on the NYSE.... more
Dividends are alive and well and getting back to normal. At least that is what the data for the first six months of the year would indicate. The following is a brief update on the dividend actions or inactions of the 500 companies in the Standard and Poors Index for calendar year 2010.
This information is based on announced dividend actions as reported by Bloomberg and is taken from Bloomberg Professional Data.
361 pay a dividend. 139 do not pay a dividend. 3 have cut or eliminated their dividends in 2010. 12 have initiated or reinstated their dividends. 97 have announced a dividend increase. The median increase for those companies hiking their dividend has been 6%. The industries with the most dividend increases have been the Consumer Cyclicals and the... more
There comes a time when you realize that Fast Money is not always the Best Money especially if you survived the carnage of 2008/2009. With all the volatility presently in the markets - 200 points up, 200 points down on the DJIA and then 200 points up again - when do you buy and when do you sell? For a trader it is challenging enough, but for an investor what can you do? I asked myself these questions: 1. Which companies survived relatively well in the last 3 years with good profit margins, reasonable levels of debt, ROA, ROE, and pay dividends? 2. What volatility did these companies experience in their share price over the last 52 weeks? 3. What sort of returns could I potentially gain holding these companies medium to long term?... more
The current situation with BP (BP) raises a bevy of thorny questions, not the least of which is how pensions and other types of institutional investors should deal with the asset allocation fallout.Let's start with the facts about institutional ownership of BP. According to Yahoo Finance and as excerpted in the table below, over 1,000 institutions owned stock in BP as of late March 2010. A relatively high dividend payout rate and dividend yield likely held great appeal for organizations seeking stability.... more
Joe Banks (JOSB) announced today a 50% stock dividend. In other words, that's a three-for-stock stock split. If you own 200 shares, you'll get another 100 and you can expect the share price to drop by 33% (yes, a 50% increase followed by a 33% drop brings you back to where you started). Ultimately, a stock split doesn't mean anything to shareholder value. Companies say they do it to increase liquidity but that didn't hold back Berkshire Hathaway (BRK.A) for many years. In reality, these are nice press releases companies like to put out throughout the year, and JOSB has done well.... more
Many novice investors get into the world of dividend investing because of the belief that it is possible to generate double digit current yields. They purchase these securities in pursuit of current income, only to see these distributions cut after a few months. The truth is that few companies can afford to pay high dividends, unless they are pass-through entities such as master limited partnerships or real estate investment trusts to name a few.I have highlighted the top 20 yielding stocks in the S&P 500 index below:... more
2010 has become the year of the dividend. Last year, 68 of the S&P 500 stocks cut their dividends and another 10 stocks completely suspended their dividend payments. Nearly midway through 2010, only a single S&P 500 stock has cut their dividend (Valero Energy) and only one stock suspended their dividend payments (Tesoro). While news of BP’s dividend cut has captured the majority of headlines in recent weeks, 2010 could end up being a banner year for investors. Here is a look at the 10 stocks initiating dividends in 2010.... more
Investors often ask: "What are the advantages of a dividend stock?" Senior analyst Anand Chokkavelu (who has given his thoughts on the subject here) sat down with James Early, lead advisor of The Motley Fool's dividend investing service, Income Investor, to discuss the question.... more